Clustering as a Form of Improving Manufacturing Performance and Economic Growth in South Africa

South Africa's current industrial policy has a two level focus: sectoral and spatial. The former (addressed here) deals with improving the performance and competitiveness of the manufacturing sector, thus ultimately boosting economic growth. The recent adoption of such industry cluster policy in South Africa has been complemented by a change in the focus of trade policy, to export promotion and international competitiveness. The Department of Trade and Industry (DTI) has played an active role in the establishment of some of the cluster iniatitives, most of which are still in the early stages of their development. The strategy has been to concentrate on a few role model clusters that would demonstrate the potential gains of the collaborative process. One such cluster is the motor industry cluster in the Eastern Cape, which was established in 1997. The objective of this paper is to investigate the impact of the automotive cluster initiative in the Eastern Cape on the manufacturing performance of this industry. Empirical information from a questionnaire survey and interviews, involving both motor vehicle 2 assemblers and component manufacturers in the Eastern Cape region are used.